Carve-out Support Consultant: What Do They Do & How Do They Help?

If you’re considering a carve-out, time to close is likely top of mind. However, shedding an area of your business or merging it with another is no easy feat.

Issues can arise from any number of places, people or processes — and without the proper oversight, you’ll find that ensuring a successful transaction gets harder and harder to achieve while the value of the deal greatly depreciates.

That’s where carve-out support consultants come in.

Everything you need to know about carve-out support consultants:

• What is a Carve-out?
• What does a Carve-out Support consultant do?
• When should you hire a Carve-out Support consultant?
• How can a Carve-out Support consultant help your business?
• Types of projects Carve-out Support consultants work on, plus examples

What is a Carve-out?

A carve-out occurs when a business sells an asset, interest or investment to outside investors, receiving a cash infusion that allows them to continue refining their operations without the total loss of control and oversight. The asset being sold is not the business itself but rather a particular area that will often operate more efficiently underneath a different roof or with additional support.

Carve-out activities:

• Due Diligence Support: Preparing careful due diligence strategy to ensure mitigation of risks and efficient execution of the carve-out
• Finance Transformation: Restructuring and optimization of finance functions
• Post-merger Integration: Conducting successful integrations of separate entities, allowing for the maximum value of the deal to be realized

What does a Carve-out Support consultant do?

A carve-out support consultant manages business, accounting and risk issues throughout the course of the transaction, providing expert guidance on how to minimize disruption and drive positive change by refining the services with the highest yield and shedding assets that are less profitable.

Skills of Carve-out Support consultants:

• Assessing company, processes and employees for areas of improvement and potential risks
• Developing roadmaps for due diligence
• Creating carve-out strategies that maximize the value of a transaction
• Managing complexities of operational activities
• Reducing time to close
• Driving financial system implementation and testing
• Identifying finance function issues and areas for improvement
• Advising clients on how to optimize accounting functions, internal controls, and more

When should you hire a Carve-out Support consultant?

If you’re considering a carve-out, hiring a carve-out support consultant is instrumental in ensuring you experience little interruption to business as normal. Conducting a successful carve-out includes the seamless blending of separate entities, including their people, processes and systems — and without the proper oversight, you’ll end up wasting time and money as your team scrambles to figure out what to do.

How can a Carve-out Support consultant help your business?

• Optimizing operations, processes and systems for maximum efficiency
• Managing the inflow of cash from investors and shareholders
• Integrating stronger due diligence strategies, safeguarding your organization from potential threats
• Reducing time to close while allowing for the maximum realization of the deal
• Providing expert guidance on which assets are most profitable and which should be sold

Types of projects Carve-out Support consultants work on, plus examples:

A carve-out support consultant works on many different types of projects, including everything from analyzing and reworking operations to managing stakeholder relationships.

Let’s take a look into one of the Bridgepoint Consulting team’s previous experiences as an example of the types of projects private equity consultants are often tasked with. For a more detailed look, please head to our carve-out case study.

A highly specialized private equity group (Client) purchased a large energy technology company’s business unit.

As part of the private equity group’s growth goals, they proceeded to carve out an individual company that provides global pressure control products and services (Investment Company) and merge with an existing portfolio company.

The client turned to Bridgepoint’s carve-out support consultants for guidance with refining their Transition Service Agreement (TSA) process and providing IT infrastructure services.

To meet the carveout transaction’s needs, our consultants deployed compute, storage, data, identity, and infrastructure services on Microsoft Azure, just days after the deal closed.

After successfully implementing a new IT infrastructure and ensuring the goals of the carve-out were met, we saved the Client approximately $1.35m in additional fees as provisioned by the TSA.

As you can see, the types of projects carve-out support consultants work on take many different forms — but the bottom line is that they’re instrumental in limiting business interruptions during carve-outs, minimizing separation costs and facilitating the integration of better systems.